Case Studies

Entrepreneurs come in all shapes, sizes and ages. The one thing they have in common is the desire and passion to succeed against all odds. The following are case studies of deals FSW Funding has funded.

Startup

Young Entrepreneur Finds Funding Solution with FSW Funding

The Obstacle

Ray, a recent college graduate, decided to take some time off before entering the working world by traveling the globe. He spent six months seeing sights he had always dreamed about and thinking about what direction his life would take when he returned home. As a tourist he picked up various items and shipped them home. One such item was a glass cutter, which was not unique, but it eventually became the launching pad for his successful business venture.

Back home in Arizona, Ray began testing the glass cutter on some old wine bottles, and discovered that when he cut off the top half of the bottle, the bottom portion could be made into a wine glass. What a concept; and a great way to utilize and recycle wine bottles.

Ray quickly seized the idea, and went to local restaurants to collect their used wine bottles. Think free cost of goods! Ray, in turn, created a production line to cut the tops off the bottles, sand the edges and package in glass sets. Buyers quickly found Ray and his “green” wine glasses, and orders began rolling in. He was selling wine glasses faster than he could produce, and even though the bottles were free, he still needed cash flow to pay his employees, vendors and cover his other business expenses.

The Solution

When Ray went searching for a solution to his cash gap (e.g., timing difference created when the cash flows out faster than it comes in), he didn’t have a lot to offer traditional lenders. He couldn’t secure a bank loan because his business was less than three years old, and he didn’t have a lot of assets, except for his accounts receivable.

Ray found an ideal solution with FSW Funding. FSW Funding focused on the credit quality of Ray’s customers rather than the cash flow of the business, and underwriting the future of the business, not the past.

The Outcome

FSW Funding was able to fund Ray’s accounts receivable and help him stay on top of cash flow. The financing FSW Funding provided allowed Ray to take advantage of vendor discounts, expand his marketing efforts and to build a larger production facility. Ray’s business did so well over the course of two years, he was able to find an equity partner that can help him grow the business internationally.

Mature Business

Starting Over with FSW Funding

The Obstacle

Kirk was living the American Dream – large house, beautiful family and wildly successful printing business. Then it happened. Kirk’s largest customer went bankrupt, which meant 30% of Kirk’s accounts receivable would be ineligible under his existing bank line of credit.

Kirk did all the right things; he contacted his bank immediately and began cutting expenses. Unfortunately, with 30% of his receivables in limbo and the corresponding cut in ongoing revenue, Kirk’s business suffered. In an effort to keep his business afloat, he started to stretch out payments to vendors, but found he owed more to the bank than he had in eligible assets. After meeting with a banker, he learned there was little the bank could do, considering the loan was underwater and the business financials were deteriorating. Kirk realized that without access to cash flow soon he would have to close his doors.

The Solution

Kirk’s banker recommended he speak with FSW Funding. FSW Funding worked with the bank to map out a solution where the bank would subordinate the company’s accounts receivable to FSW Funding. With the subordination in place, FSW Funding could fund on the invoices Kirk was generating and allow Kirk to tap into the cash flow of those assets.

The Outcome

Kirk was weeks from losing all he had built over the years. His business was slipping away but thanks to the banker’s fast thinking, and the ability of FSW Funding and the bank to work together, Kirk was able to work through a very tough economic time. FSW Funding allowed Kirk to stay current with vendors and slowly rebuild his business. The bank also came out ahead since the capital provided by FSW Funding kept Kirk from closing his doors and ultimately, allowed him to pay off his bank loan.

Acquisition Funding

Buying a Business is as Easy as Calling FSW Funding

The Obstacle

Ben is a serial entrepreneur. He has bought and sold a variety of businesses in his life; and he knows a good deal when he sees one. Ben also knows how to pick the right lender.. He understands that the right lender can make or break a business deal. So, when Ben found his latest venture, a struggling toy manufacturer, Ben knew exactly which lender to choose – FSW Funding.

The toy company Ben found to buy manufactured a classic toy which still had a lot of appeal to kids and adults alike. The toy company had been a family owned business for over 60 years but the current generation didn’t want to be in the toy business anymore and the financials reflected this. No one was running the company so sales were slipping and costs were increasing. Ben saw his opportunity to buy the toy company and turn it around. The only issue was coming up with enough cash to buy the business in a short amount of time.

The Solution

Ben called FSW Funding to see how they could help. FSW Funding did a quick look at the balance sheet and said if Ben factored the accounts receivable, he would not only have enough cash for the purchase but additional liquidity for the turn around.

The Outcome

FSW Funding worked with Ben and funded the purchase of the business in 5 business days! Ben also was able to use the additional funds to revamp the advertising program and complete deferred maintenance on the production line. Sales are up and Ben is the proud owner of a prosperous toy company.